Brief performance review
On April 24, 2024, the company released its 2023 annual report. In 2023, the company achieved revenue of 10.89 billion yuan (+26.4%, year-on-year, same below); realized net profit of 506 million yuan, compared to -550 million yuan in the same period last year; realized net profit of 463 million yuan after deduction, compared to -570 million yuan in the same period last year.
On a quarterly basis, in 2023, Q4 achieved revenue of 3.68 billion yuan (+29.8%); realized net profit of 280 million yuan, compared to -170 million yuan in the same period last year; realized net profit of 240 million yuan without deducted income, compared to -140 million yuan in the same period last year.
Management analysis
The four major brands have developed collaboratively, and the sharp rise in volume and price has promoted performance growth. In 2023, the company's “American Health” brand achieved revenue of 8.432 billion yuan, accounting for 77.4%; “Ci Ming” and “Ci Ming Oya” achieved revenue of 2,277 billion yuan, accounting for 20.9%; and the “Meizhao” brand achieved revenue of 185 million yuan, accounting for 1.7%. The number of medical examination centers under the company is 596, of which it controls 306 medical examination centers and shares in 290 medical examination centers. The company received a total of 28.34 million visitors (including participating in the physical examination center and excluding the number of people tested for nucleic acid), +13.0% compared with the same caliber. Of these, the holding medical examination center received 17.55 million visitors, +13.7% over the same period last year. Group customers and individual customers accounted for 80% to 20% of revenue, respectively, and individual customers increased 2.8 pct of revenue over the same period last year. The unit price for a comprehensive customer was 620.8 yuan. Compared with the same period, +11.2% digital operation enables development, and the layout AI continues to innovate. In 2023, the company achieved digital transformation of the entire business. The self-developed next-generation smart medical examination cloud platform Bian Que has achieved more than 95% branch coverage and further completed the process re-engineering of the core business. Bian Que and medical technology SAAS groups such as LIS, PACS, and ECG cloud platforms digitize all business processes such as medical examination appointments, on-site examinations, tests, imaging diagnosis, and report generation. The company continues to combine big data from health examinations with AI artificial intelligence to release the country's first innovative product “Brain Ruijia” focusing on early screening for stroke and Alzheimer's disease, and is the first in the industry to launch the full-process closed-loop management service package product “Pulmonary Nervation”, etc. We are optimistic that “AI+ Healthcare” will continue to blossom and empower the company's business development.
Profit Forecasts, Valuations, and Ratings
We are optimistic about the long-term development prospects of the company as a leader in the domestic professional medical examination industry. The 24-25 profit forecast was raised. The net profit forecast for 24-25 was 7.94/1,058 billion yuan. The net profit for 2024-2026 is estimated to be 8.18/12.06/1,516 billion yuan, respectively, up 62%/47%/26% year on year, EPS is 0.21/0.31/0.39 yuan, respectively. The PE corresponding to the current price is 21/15/12 times, maintaining the “buy” rating.
Risk warning
Medical quality risk; risk of increased market competition; risk of falling short of expectations in passenger traffic recovery; risk of impairment of goodwill; management risk caused by chain operation; stock pledge risk, etc.